Sunday, 20 June 2010

One of things I’ve always observed about evangelists for the free market is that few of them like to take their case to its logical conclusion. If they did, they would see their arguments quickly collapse under the weight of their own incoherence. Think of a robot in a cheap sci-fi movie overwhelmed with conflicting data and starting to smoke.

Let’s take the Con-Dem plans announced last week for the creation of ‘free schools’, for instance. The principle of the scheme – modelled on similar ideas in the USA and Scandinavia – is to allow pretty much anyone to set up an educational establishment. Ideologically, the premise is that the state should no longer have a monopoly on schooling or curriculum and that unpopular schools should be allowed to go to the wall.

I’m not going to get into the technicalities of whether all this can be made to work on the ground, but I do have a question. If anyone can run a school, why can’t they run a hospital?

Before you laugh and tell me that hospitals are completely different, it’s worth remembering that the Con-Dems don’t actually make it a requirement for people running ‘free’ schools to have any knowledge of education. It’s accepted that they can be a bunch of well-meaning do-gooders who buy in expertise from teaching staff and educational administrators. In fact, I don’t see any fundamental obstacle to a group of functionally illiterate yokels setting up a school that teaches barn dancing, provided they employ someone who can fill in a form for them.

So surely I can run a hospital? I may not be medically qualified myself , but I know people who are. There’s a disused warehouse a couple of miles away that would make an excellent outpatients’ clinic. I won’t follow any nationally agreed guidelines on how to treat people, but if someone wants to roll up, that’s their choice, isn’t it?

Let’s take things a stage further. What if I lived in an area where there was dissatisfaction with the standard of policing? Why should the state have a stifling level of control over the justice system? I could get together with a group of concerned residents and establish my own security force. If neighbours wanted to withhold the portion of their taxes that went to the local police authority, they could donate it to me instead. I’d give them a card – a little like membership of the AA or RAC – that would allow them to call me any time they liked.

Of course, I’m being a bit mischievous with all this. But truly free markets are an absurdity and people who advocate them are rarely guided by any coherent principles. If they were true to their intellectual logic, they would propose opening up the markets for prostitution, drugs and firearms. (In the loony days of Margaret Thatcher, there were a few libertarian splinter groups – the Federation of Conservative Students, for example – which did indeed advocate some of these positions, but they had to be disowned. Even the Iron Lady realised that pure market ideology would produce unacceptable social consequences.)

The reason we gradually established and entrenched state education in the UK is because ‘free’ schools founded by philanthropists, religious zealots and busy-bodies were hopelessly inadequate. Prior to the 1870 Education Act, large areas of the country simply didn’t have any proper educational provision at all. Those parliamentarians who didn’t much care for the moral arguments in favour of educating the working classes were persuaded by the functional economic need: Britain’s manufacturing base needed more people who could read, write and add up.

In the early part of the nineteenth century, there was huge opposition to the establishment of a national police force because it was thought to be a tyrannical instrument of state oppression. The kind of thing that Johnny Foreigner would do. It was only when the inadequacies of the old night watchmen began to be exposed – and crime started to rise in growing cities – that people turned to the state. Even then, Sir Robert Peel’s first police force was seen as a trial or experiment at the time it was launched.

In almost every area of life, people turn to government when the going gets tough and they discover that we can achieve more collectively than we can as individuals. You don’t have to be a red-blooded socialist to buy into this way of thinking. Just someone with half a brain in your head.

And talking of people with half a brain in their head, how exactly have Nick Clegg and his sidekicks like Danny Alexander got swept up so quickly with all the Tory free-market nonsense? Have they had a Paulian conversion? Absolutely not. They’ve always been on the economic right, but were previously constrained by the grassroots of the Liberal Democrats and the need to win elections. As I’ve noted before, the only way they could triumph in many constituencies was by claiming to be the anti-Tory party and soaking up the votes of Labour supporters, who were informed their party couldn’t win. Now, the Lib Dem argument is exposed as a hollow sham and its advocates as a bunch of self-serving hypocrites.

It’s very clear that the political cover provided by the Lib Dems is absolutely essential to Cameron and Osborne. In many ways, the coalition government is allowed to get away with deeper cuts because it is seen as being more representative of public opinion. But people who voted Lib Dem didn’t support Clegg so that free school milk budgets could be transferred to ‘free school’ milkers who are looking for state money to pursue their own vainglorious ends.

It will, of course, all end in tears – probably during the course of a second recession created by the savage public service cuts. Eventually, a proportion of the Lib Dem parliamentarians will realise they have been used to do the Tories’ dirty work and received precious little in return. The game will be up. But how much damage will have been done in the meantime?

Monday, 7 June 2010

When David Cameron said in his set-piece speech yesterday that everyone is going to share the pain, he was talking through his old Etonian top hat. Some people will hardly notice the impact of the proposed cuts, whereas others will potentially have their lives turned upside down.

As the Prime Minister spoke, another story was hitting the 'weird' and 'offbeat' sections of the leading national newspapers. Three rundown garages in the celebrity enclave of Primrose Hill, north London, are being offered for sale at the staggering price of £1.25m. It's amazing what people will pay to buy a scrap of land next door to Gwyneth Paltrow and Jamie Oliver, isn't it? Having spent a couple of years on the Hill myself during the mid-90s (in a poorly converted flat on Ainger Road with a permanently broken boiler), I can vouch for the area's salubrious character. I really did sit in a beautiful laundrette with David Miliband and pop across the road to a café where Alan Bennett and Jonathan Miller were in earnest conversation. Even so, the estate agents flogging the grotty lock-ups are chancers and anyone prepared to pay the asking price should be knocking on the door of the nearest analyst. Who would probably be a couple of doors down.

My point is that most residents of Primrose Hill will be immune from the effects of the government's cuts. But if you take a walk through the high street and over the bridge towards Chalk Farm and Camden Town, it would be a very different story.

Are the Cabinet members really in the same boat as us? Like hell they are. They took a symbolic pay cut at their first meeting, but a clear majority of the Con-Dem con artists who've taken their place at the table don't even rely on their ministerial salaries. They are millionaires. According to The Sunday Times last month, Dave Cameron's estimated £3.4m fortune is small fry compared to the amounts owned by some colleagues. The paper reveals that Transport Secretary Philip Hammond has a mansion with a tennis court and swimming pool in Surrey, but still likes to keep a £2m pied-a-terre in Chelsea. If the 8.04 to London Waterloo gets cancelled in the forthcoming budget butchery, I suspect he's not going to be unduly concerned.

If this all sounds pretty grim (and it certainly will to those of you who voted Labour or perhaps who voted Lib Dem in the naive belief that you were keeping out the Tories), there is a silver lining. It's possible that the rich could suffer simply through the sheer stupidity of the Con-Dem cuts regime. Look at it this way. The sensible approach to tackling the financial black hole is to encourage economic growth and see a positive return from the enforced investment we made in the British banking system. This is perfectly feasible and the kind of strategy that the former Chancellor Alistair Darling was pursuing. Of course, there will have to be significant cuts in public spending too, but the current government's over-zealous approach to the deficit threatens the very growth that will ultimately rescue us.

As the cuts bite, the public sector will start to choke off private sector businesses that rely on government contracts. Jobs will be lost on both sides of the divide. Unemployment will start rising again and people who are out of work don't pay taxes. Worse still, they need benefits. And almost certainly they won't be frequenting the local shops, restaurants and leisure facilities they used to patronise. Holidays will be cancelled and large purchases postponed. We then get the secondary squeeze on all the service industries that rely on consumer spending. Net result: another recessionary wave, which wipes a whole load of value off share prices and the smile off the faces of those who thought they would shelter from the storm in their garages in Primrose Hill.